Analyst Jonathan Eckard commented that although the ultimate opportunity seemed significant, the road could be bumpy over the next 12 months.

Bumpy Ride In The Near Term

“We believe the potential utility and value for CAR T (chimeric antigen receptor T lymphocytes)/ cellular immunotherapy will ultimately expand beyond the current target oncology settings,” Eckard wrote. He added, however, that these were new innovations, with potential for hiccups.

There were potential regulatory and commercial hurdles for the first approvals of these drugs, and these challenges could “shake confidence.” Although all FDA biologic approvals are complex, cellular therapies could face even greater hurdles.

Moreover, the cost of CAR T therapies is expected to exceed $200k. Depending on the respective product profiles at the time of launch, “any unexpected pushbacks on reimbursement could cause concerns across the group,” the analyst wrote.

Juno Versus Kite

Both companies face potential headwinds over the next 12 months before the initial approvals come through. Juno Therapeutics has the wherewithal for bumpy rides, given its 10-year collaboration with Celgene Corporation (NASDAQ: CELG) and cash balance of more than $1bn. While the lack of a key collaboration may be a headwind of Kite Pharma today, it does offer “broader strategic benefits down the road,” Eckard noted.